MARKS & Spencer is to offer current accounts from this autumn after announcing plans to open 50 bank branches in the next two years.
The first outlet at the retailer’s Marble Arch store in London is due to open next month and will mirror shop opening hours – meaning seven days a week banking.
The company, which expects to create 500 UK jobs from the roll-out of the M&S Bank business, said mortgages will be offered at a later date.
It already provides credit cards, loans and savings to more than 3m customers under M&S Money, which is run as a joint venture with HSBC.
M&S chief executive Marc Bolland said the chain will look to build on its reputation as one of the high street’s most trusted brands.
He said: “This bank will be built on M&S values, putting the customer at the heart of the proposition and delivering the exceptional service that sets us apart from the competition.”
HSBC described the venture as its most “significant innovation” in UK retail banking since it launched First Direct more than 22 years ago.
The launch of a new player in the lending market comes as mainstream banks battle to win back the confidence of customers.
David Black, a banking specialist at financial research company Defaqto, said the retailer’s venture “provides another option” for customers at a time when supermarket giant Tesco is also expanding its financial products.
He said: “It’s pretty good news, particularly to have 50 planned banks open on Sundays.”
Mr Black said that most of M&S Money’s rates on the products currently on offer, such as personal loans, credit cards and savings products, were above average in competitive terms and periodically appear in best buy tables.
M&S Money’s product range includes personal loan rates at 6% APR on borrowing between £7,500 and £15,000. Tesco and Sainsbury’s also offer similar deals, with 6% rates for loans in this bracket, Moneyfacts said.
David Hollingworth, associate director of mortgage brokers London and Country, agreed that the retailer’s move is a “positive thing” for mainstream customers.
But he believed that people shut out of the mortgage market as lenders tighten their borrowing criteria were unlikely to see a big breakthrough.